The annual deficit has fallen 32% over the first seven months of this fiscal year compared with same period last year, according to Congressional Budget Office figures released Tuesday.

A major reason: A big jump in tax revenue.

Tax collections rose by $220 billion -- or 16% -- between the start of the fiscal year on Oct. 1 through April 30. Individual and payroll taxes accounted for $184 billion of that increase.

The tax haul rose sharply primarily because wages and salaries were higher, the payroll tax cut of the past two years expired on Jan. 1 and the fiscal cliff deal brokered over New Year's raised tax rates on high earners.

The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.

For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.

The decrease is almost entirely due to revenue increases. Revenues rose $200 billion and spending decreased only $11 billion.

Individual income tax and social insurance payroll taxes are up 16 percent this year compared to last year.

In January, Congress and the White House agreed to allow income taxes on those making more than $400,000 per year to rise and to end a 2-percentage point payroll tax holiday for all workers.

That has contributed to $132 billion more in income taxes and $52 billion more in payroll tax revenue, CBO estimated.
On the spending side, major discretionary items like defense saw notable decreases, but the mandatory entitlement programs continued their relentless march upward in cost.

Whereas defense spending has fallen by $20 billion, spending increased by $25 billion for Social Security and $15 billion for Medicare as the baby boomer generation ages into retirement.

Translation: Even with the Sequester cuts and massive tax increases, we are still on track to spend nearly a trillion more than we are taking in this year on top of the $16 trillion dollars in debt that our country is in and $80 trillion dollars in unfunded liabilities.

Whoopi!

8
posted on 05/11/2013 10:08:36 AM PDT
by icwhatudo
(Low taxes and less spending in Sodom and Gomorrah is not my idea of a conservative victory)

In 2005, under Bush administration, there was a huge infilux of cash into the budget because tax cuts kicked in and economy grew at robust rates. This current trend is temporay, because of higher taxes the economy will go down and budget deficits will start to grow again.

10
posted on 05/11/2013 10:11:24 AM PDT
by Mi-kha-el
((There is no Pravda in Izvestiya and no Izvestiya in Pravda.))

A major reason: A big jump in tax revenue. Tax collections rose by $220 billion... Individual and payroll taxes accounted for $184 billion of that increase... Spending, meanwhile, fell 1.9% year over year, the CBO estimated.

13
posted on 05/11/2013 10:28:13 AM PDT
by SunkenCiv
(Romney would have been worse, if you're a dumb ass.)

A lot of the big jump in income is special dividends by companies trying to beat a possible jump in the dividend tax rate from 15% to 43 %.

Although the tax never happened, many companies jumped their dividends to the last part of 2012.

On a personal level, I took about 100K of cap gains in 2012 just in case the cap gains tax jump. This was a one time event for me as I sold stock I held a long time and bought it back the next day (the wash sale rule applies only to losses, not to gains.)

China is soaking up money and trade. Chinese trade laws are extremely one-sided, requiring local content and more importantly, ensuring a one-way flow of ever more money into the country by requiring goods be made in China with a majority ownership also, Chinese.

The cost difference was so great, that a huge number of American firms sold out, and now a majority of our “goods” are cheap imports.

Either way one might choose to paint the picture...the US is being stripped of it’s resources by other nations and leaderships in these trade deals....be it people, companies, and talent being shipped out to other nations....and if they can’t or won’t leave leave then those nations come here, buy them up, and put them under their roof.

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